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2020 (5) TMI 257 - AT - Income TaxIncome from House Property - ALV determination - treating Municipal taxes paid as rent labile to be taxed u/s 23 - deduction of BMC Taxes - HELD THAT:- As per the terms of lease and license agreement, the licensee alone was liable to pay all taxes / outgoings with respect of leased premises. Same could be paid by the assessee and the same were reimbursable by licensee. This position has also been reiterated by the assessee in its submissions. However, the liability to pay the taxes was with respect of licensed premises only which was approx. 19% (232 Sq.Meters out of 1246.66 Sq. Meters) of total area of the building. Therefore, 19% of BMC taxes amounting to ₹ 7,99,519/- could be attributed to licensed premises. The proportionate amount comes to ₹ 1,51,900/-. In our opinion, this amount shall be added back to the rental income of ₹ 76 Lacs earned by the assessee. Consequently, the deduction of ₹ 1,51,900/- shall be allowable to the assessee. The rental income, after statutory deduction of 30%, would work out to ₹ 53.20 Lacs.Ground No.1 & 2 stand partly allowed. Allowability of business expenditure - HELD THAT:- We find that the assessee has not practically carried out any business activity during the year. Therefore, the expenditure on account of directors’ remuneration would not be allowable to the assessee. However, the expenditure as tabulated at serial nos. 2 to 6 of table extracted in para-2.2 above, could be considered as expenditure incurred to maintain the corporate personality of the assessee and therefore, the same would be allowable business expenditure. The question of deduction of the expenditure under the head Income from other sources do not arise. Ground No.3 stand partly allowed
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